The term watercraft covers a range of different water-borne vehicles including ships, boats, hovercraft and submarines. The term would normally imply some propulsive capability (whether by sail, oar or engine) and hence is distinct from a simple device that merely floats, such as a log raft.
Most watercraft would be described as either a ship or a boat. However, there are numerous craft which many people would consider neither a ship nor a boat, such as: surfboards (when used as a paddle board), underwater robots, seaplanes, jetskis and torpedoes.
Although ships are typically larger than boats, the distinction between those two categories is not one of size per se.